Audit Plan Status June 4, 2012 Page 2

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2 Page 2 b. Open Action Plans: The Office of Internal Audit continues to monitor and follow up on the status of action plans that were developed to address audit findings and recommendations. There are 40 open action plans, with 35 resulting from audits completed during 2009 through Attachment A provides further information by division/office. 3. Audit Projects On Hold a. Life Rate Changes to Member Accounts b. Lump Sum Payment System The above projects have been placed on hold while Claudius Lebi and I are directly involved with the Department of Employee Trust Funds (ETF) annual reconciliation process. Annual reconciliation is the process used by employers to provide ETF with calendar year hours and earnings for their Wisconsin Retirement System (WRS) participating employees who are actively employed at the end of the year. During this process, ETF staff work with the employers to ensure monthly and annual information is in balance. Reconciliation assures that contributions have been paid for the calendar year for all WRS-covered employees. Reconciliation must be completed before final account adjustments are made, annual Statement of Benefits are issued, ETF s financial statement is prepared, and the audit of ETF s financial statement is completed by the Legislative Audit Bureau. 4. Audit Projects Start Dates To Be Determined a. myetf Benefits b. Actuarial File Testing (Active Lives) c. Actuarial File Testing (Retired Lives) d. Continuity of Operations Program e. Internal Control Plan Review f R Data Review g. Review of SSAE 16 Reports 5. Audit Project Cancelled Accumulated Sick Leave Conversion Credit Data Maintenance and Processing Accuracy Audit: This audit has been cancelled as a result of ETF s initiative to replace the current sick leave system by the end of The Office of Internal Audit will provide advisory services to the development team.

3 Page 3 6. Advisory Services/Special Requests a. Data Governance Operations Project Pilot Team: Helen Malzacher represented Internal Audit on this team, which concluded its work in January The data governance pilot project was to use data governance processes to analyze how important data assets are formally managed throughout ETF. Specifically, the project looked at various issues surrounding ETF s collection, storage, and use of addresses of active employees to prepare the annual Statement of Benefits (SOB) mailing. b. ETF Security Council: I have been participating in regular Council meetings, providing advice about data governance security policies (e.g., data classification, logging, auditing, and computer security incident response). c. Reconciliation of Vendor Invoices to Account Deductions: This project was requested by the Office of Budget and Trust Finance (OBTF). Specifically, each month there are variances between the invoices approved for payment by OBTF to the health insurance providers and the total deductions from annuitant sick leave accounts and/or monthly annuity. The objective of the project is to assist the Division of Retirement Services and Division of Management Services in determining the cause of the variance and the measures that can be taken to eliminate as much of the variance as possible and be able to account for the variance from the reconciliation. d. Annual Annuity Adjustment Technical Documentation: Ms. Malzacher is providing advisory services to the Division of Retirement Services by providing feedback on draft technical process documentation. e. Affirmative Action Committee: Mr. Lebi was appointed to this Committee. f. Record Disposal Authority (RDA) Review: Ms. Malzacher is providing advisory services to the Division of Management Services and Office of Budget and Trust Finance on the development of RDA 158 Retired Lives Databases. The database is developed and provided to the Retirement Board consulting actuary in support of the annual valuation completed by the actuary. 7. Training/Association Meetings a. Webinars: i. Institute of Internal Auditors (IIA) Managing 3 rd Party Risks (Mr. Lebi) ii. The 7 Deadly Sins of Report Writing (Mr. Lebi) iii. Anti-Corruption: What Every Internal Auditor Needs To Know (Mr. Lebi) iv. American Institute of Certified Public Accountants - Committee of Sponsoring Organizations of the Treadway Commission (COSO) - COSO s Proposed Revision to the Internal Control Integrated Framework (myself, Mr. Lebi) v. IIA Auditor Roles in Public Sector Performance Auditing & Measurement (Mr. Lebi) vi. Society of Information Systems Auditors of Wisconsin meeting (Ms. Malzacher)

4 Page 4 vii. Monthly Roundtable Conference Call - Madison IIA (myself) viii. Planning & Conducting a Fraud Risk Assessment (myself) I will be available at the Audit Committee meeting to answer any questions you may have. Attachment: Summary of Open Audit Action Plans

5 Attachment A Summary of Open Audit Action Plans June 1, 2012 DIS DMS DRS OBTF OIA OPPC Totals Totals DIS Division of Insurance Services: Compliance Audit - Group Health Insurance (2008 & 2009) Compliance Audit - ERA/Commuter Benefit Programs (2006 thru 2008) DMS Division of Management Services: 2005 Custom File Maintenance Audit 2009 Retirement Calculation System Audit 2010 Retired Lives Actuarial Data Verification Audit DRS Division of Retirement Services 2004 Match of Social Security Administration and WEBS Death Records Audit 2011 Retirement, Death, Disability, and Service Purchase Estimates Audit OBTF Office of Budget and Trust Finance Financial Audit Year Actuarial Audit OIA Office of Internal Audit Follow-Up Audit of Prior Observations OPPC Office of Policy, Privacy and Compliance Retirement Calculation Audit - Staff Access to Electronic Data